BREXIT Britain will be penalised by the “jealous” European Court of Justice (ECJ) when it has its final say on its withdrawal from the EU unless the UK makes a radical move, a thinktank said.

The Institute for Government advised Britain to quit the ECJ and instead sign up to the European Free Trade Association Court and place its own judges in it, or create an “inventive and untested” new dispute resolution system.

Warning that the ECJ would “struggle to be neutral” in disputes between the UK and the EU, the Whitehall thinktank urges Brexit negotiators to stand up to the ECJ and not just go along with its plans, in a report published today.

The EFTA Court deals with disputes between EU and EFTA states Iceland, Lichtenstein, and Norway.

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The report added it was “inevitable” for the ECJ to continue to influence UK businesses and residents, and it would be difficult to challenge its role as the authority of EU law.

Author of the report Raphael Hogarth said the ECJ is a “jealous guardian of its monopoly over the interpretation of EU law”.

He said: “Since citizens’ rights, the divorce bill and any transitional arrangements will all be rooted in EU law, UK and EU negotiators are constrained in terms of what dispute resolution mechanism they can dream up for the withdrawal agreement.

“The ECJ will throw out anything which, in its view, threatens the EU’s legal autonomy.”

But he urged both sides to move the conversations forward.

If the UK joined EFTA it would be able to leave the single market, but the report adds it would mean accepting some influence from the European Court after Brexit.

If MPs decided this wasn't acceptable, the IfG mooted the idea of the UK creating its own version of the court, with only UK judges.

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But while it "could" be legally acceptable to the EU, Brussels would see it as the UK “making its own homework”.

The IfG added Brexit secretary David Davis’ proposals for an “arbitration arrangement” were workable for a trade deal, but could to be a “legal and political minefield” for details in the divorce agreement because of EU rules about who interprets EU law.

But the report says this could be negotiated to make it acceptable for both sides.

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